How Climate Science and Green energy policies ate the world
And became a massive multi-trillion dollar industry.
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Greens like to portray themselves as idealistic rebels who are fighting the greedy establishment. Perhaps that was true in the 1960s and 1970s, but it is exactly the opposite today. Green energy is in fact one of the largest industries in history, and that industry has huge financial backing from governments and billionaires.
I think most people do not understand the sheer scale of Green energy subsidies and mandates by governments. The Bloomberg New Energy Finance (BNEF) estimates that global Green energy spending has reached $1.769 trillion per year. This is more than three times the total global Green spending in 2019.
As a point of reference, the total expenditures of the US federal government came to $6.1 trillion (or 22.8% of the US GDP).
This amount is roughly double current spending on fossil fuels and its associated infrastructure. So much for renewables being cheaper than fossil fuels.
BNEF celebrates Green energy policies as a good thing, but warns that current investment are still nowhere near enough spending. To reach global Netzero by 2050, BNEF projects that the world would need more than quadruple annual spending to $7.5 trillion per year!
And to the best of my knowledge, no one affiliated with the Green movement is the slightest bit concerned about spending that kind of money despite very tepid results on the first $10 trillion.
So where did this all come from?
See also my other posts on Green energy policies:
A simple and cost-effective plan to quickly lower US carbon emissions
More evidence that solar + wind cannot decommission coal plants at scale
You should also check out my “From Poverty to Progress” book series:
So where did this all come from?
Not too long ago, a reader asked me how Green energy policies became so widespread. Is it a conspiracy, a hoax, or something else?
No, I believe that Green energy policies are best thought of as:
A scientific discovery that
Morphed into an ideological movement and
then morphed again into a $1.7 trillion/year (and growing) rent-seeking industry.
By “rent-seeking,” I am using the classic economics definition: the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth. Rent-seeking activities have negative effects on the rest of society.
In this case, the main negative effect is to make energy much more expensive.
Key actors that grew this rent-seeking industry are:
Environmental activists, who gradually shifted their focus to climate change.
Climate scientists, who need funding from governments and billionaires
Climate reporting in the media
Energy subsidies and mandates from the state and federal government
A large portion of the venture capital banks under the guise of ESG
Green energy industries, such as wind and solar.
In this way, a Left-wing ideological movement creates a massive industry that focuses on chasing subsidies and mandates.
So how did this happen?
Here is my brief overview of how Green energy policies became so influential throughout the Western world. I will go into more detail on many of these points in future articles.
An actual problem of climate change, but one that is far less severe than climate activists claim.
Climate change is not a hoax or a conspiracy. It is an ideological movement that exaggerates a very real problem, but that problem is only one problem among a thousand other problems.Once the climate change problem was discovered by scientists and gradually got more attention in the 1980s, Left-of-Center environmental activists moved into the field of climate science and drove out scientists with less ideological views. Preserving the climate alarm narrative became more important than dispassionate science.
Any climate scientist who publicly disagreed with the climate alarm narrative would be labeled a “climate denier.” Such a label seriously risked their reputation, career, and funding sources. It was an early version of “cancel culture,” and it was far more effective than more recent versions of cancel culture based on race, gender, and gender identity.Climate models are only as good as the data and assumptions built into them. These data and assumptions are largely hidden from public view by very complex mathematical equations that even climate experts do not fully understand. The quality of the data and assumptions are absolutely critical to projections of future temperatures and policy recommendations. As a recent survey of climate scenarios states:
”"It is difficult to overstate the influence of emissions scenarios, especially the few marker scenarios prioritized by international climate modelling efforts and the IPCC1,2. This handful of prioritized scenarios underpins global and regional projections of climate impacts1,2, United Nations deliberations on how much rich countries owe to poorer countries for climate damages2, and many private climate analytics products, which guide mitigation and adaptation decisions by banks, insurance companies and other parts of the private sector3.”The original economic, energy, and demographic data that fed into climate models were based on very unrealistic assumptions about future energy portfolios, demography, and other non-climate inputs (called “scenarios”) into the models.
has done a great job of explaining these unrealistic assumptions of RCP 8.5 on his Substack. Below are a few of Pielke’s articles that are good places to start:
The worst offender was RCP 8.5 (now known as SSP5-8.5).
The respected climate scientistTo just to give one example of an extremely unrealistic assumption that has a huge impact on projections of future temperature, RCP 8.5 assumes that global per capita coal consumption will quadruple during the 21st Century.
I doubt that there is a single energy expert or Green activist on the planet who believes that outcome is likely or even plausible. More likely, global per capita coal consumption will plateau and slowly decline.
Because coal is by far the highest carbon dioxide emitter among fossil fuels, this one assumption radically increases future projections of carbon emissions and increased temperature far beyond what is likely. And the fact that this very unrealistic assumption is built into climate models is unknown to virtually all climate scientists or energy experts.
In a brilliant marketing scheme, RCP 8.5 was branded the “business as usual” scenario. This branding incorrectly implies that RCP 8.5 is where the world is headed without government action when it is actually an extremely improbable “worst-case” scenario.
All other RCPs project future warming in the region of 2-2.5 degrees Celsius from “pre-industrial” levels (of which roughly 1.5 has already happened). So realistic assumptions lead to a prediction of roughly 1 degree Celsius warming over the next 75 years. The heavily publicized, but extremely unlikely, RCP 8.5 projects temperature changes that are 3-6 times that amount.
For more details, read: Climate Cooking: how a few billionaires helped push climate science to the extremes.
Because of this “business as usual” branding, the unrealistic assumptions of RCP 8.5 are buried in the unstated assumptions of virtually every climate model and virtually every study of the impacts of future climate change. Even the authors of these studies themselves often do not understand the assumptions that their own research is based on.
The media cherry-picks the most alarmist climate studies and reports by Green organizations that are almost exclusively based on RCP 8.5 because shocking and negative coverage drives up viewer ratings. Climate change also creates a compelling narrative for reporting bad weather which has been a common topic for reporting long concerns about climate change.
Climate scientists, activists, and environmental organizations quickly realized that they could advance their careers and attract funding by only releasing shocking and negative information, so they changed their behavior.
They understand that exaggeration is rewarded and caution is punished. The more they pursued this strategy, as opposed to objective science, the more they attracted ideological activists into the profession and drove out real scientists.Once the climate alarm narrative caught on with the Left, it created an information cascade where everyone who started with Left-of-Center views became Green maximalists or something close to it. Even many Right-of-Center politicians were caught up in the cascade.
By the late 1990s, climate alarmism was nearly universal among Left-of-Center college-educated professionals.Western Left-of-Center parties and organizations that catered to college-educated professionals found it very useful to simultaneously:
Project an image of “saving the world” by spending other people’s money.
Appeal to college-educated voters who were the most climate-sensitive
Earn votes
Disburse money to supporters.
Because of the above, Western Left-of-center parties passed a large number of government subsidies and mandates that compelled investments in Green energy.
RCP 8.5 is based on assumptions that are so unrealistic that even the IPCC has recently judged them very unlikely. The IPCC WG1 states: “the likelihood of high emission scenarios such as RCP8.5 and SSP5-8.5 is considered low.”
Unfortunately, RCP 8.5 is a key foundation of climate science models and impact studies.
Bureaucratic inertia and ideological bias make it almost impossible to unwind the flawed assumptions buried within RCP 8.5. In fairness, I think the scientists who first embraced RCP 8.5 did so out of ignorance.
The problem is not so much the existence of RCP 8.5. It is the unwillingness to retract studies based on it that is the problem. Doing so would invalidate almost all academic research on climate change and undo the life work of almost all climate scientists. The climate alarm narrative would collapse and with it the vast majority of the funding for Green energy.
As the climate science becomes more aware of the implausible assumptions of RCP 8.5 are a key foundation of climate science, this seems more and more like deliberate ignorance out of self-interest.As a means to cash in on the vast funding created by these subsidies and mandates, many financial firms embraced Environmental, social, and governance (ESG). ESG is an investing principle that prioritizes Left-of-Center environmental and social activism over profits.
As Green venture capitalists embraced the concept, ESG became a de facto extension of government regulations that are unaccountable to voters. Caught between Green activists on corporate boards, ESG requirements that venture capital, suppliers and customers must conform to ESG goal, and massive government subsidies and mandates, it is much easier for corporations to join the quest for government money than fight the tren.Government subsidies, mandates, and ESG created a huge "market" for Green energy manufacturers, utilities, and financial services companies who have a huge financial incentive to pursue government subsidies. These organizations function very similarly to defense contractors whose business models rely on the flow of government revenue.
Any firm that goes against the climate alarm narrative is punished by:
Losing access to government subsidies
Losing access to private funding from ESG venture capital
Losing access to sub-contractors and business-to-business (B2B) partners who need to follow ESG for the same reasons.
Losing market share to competitors who publicly embrace ESG (or at least pretend to)
Potentially acquiring bad media coverage
Those same organizations have a strong incentive to keep the cash flowing so they release “reports” designed to mold public opinion to keep the cash flowing. It is very similar to defense contractors but with far more money devoted to PR.
Note that once you establish governments and venture capital establish strong incentives, very few people have to agree with the goal of fighting climate change. All they have to do is pretend that they care, so it becomes a form of competitive Public Relations. All they have to do if follow the money and pretend to be saving the world.
Once you combine unrealistic ideological goals with the profit motive, things can get out of control very quickly. The ideologues can claim that their ideas make financial sense, while those focusing on earning a profit can claim that they are saving humanity from climate change.
Ironically, a left-wing ideological movement acts remarkably like the defense contractors that they despise.
The Green Energy Industrial Coalition
The chosen strategy of government subsidization of Green energy is also very useful in creating a very broad political coalition on the Center Left, including:
Politicians who want to get elected by promising to spend other people’s money (an age-old incentive).
Media who get higher ratings and social status as a result of a steady narrative of climate doom.
Green activists who get a sense of moral identity and community in their political activities.
Intellectuals who look wise and thoughtful for seeing deeper than current positive economic trends.
Solar, wind, battery, and EV manufacturing companies who seek a profit windfall from those subsidies and mandates.
Construction companies who will also get a share of the government subsidies.
Trade unions who want Green jobs for their members
Employees in all the above.
Fossil fuel companies who are tired of being bludgeoned by Greens and want good Public Relations.
Financial advisors who have been captured by ESG and have a profit and status incentive to promote a perception of enormous potential profits by investing in Green energy.
Pension funds, who have been captured by ESG and believe that funding Green energy projects is good for their client’s bottom line (because Green financial advisors told them so).
Billionaire investors who see a big profit opportunity.
State and local Departments of Transportation who want increased funding from state legislatures.
So that is my belief as to how a small left-wing group of activists grew into a multi-trillion dollar industry. It was not a conspiracy. It was not a hoax. The Green Energy Industrial Coalition started as:
A scientific discovery that
Morphed into an ideological movement and
then morphed again into a $1.7 trillion/year (and growing) rent-seeking industry.
Without massive government subsidies and mandates, the industry would be a shadow of its current size.
See also my other posts on Green energy policies:
A simple and cost-effective plan to quickly lower US carbon emissions
More evidence that solar + wind cannot decommission coal plants at scale
You should also check out my “From Poverty to Progress” book series:
Climate models are all based on scenarios. But what's a scenario? It is nothing more than an act of the human imagination, expressed in the form of if..... then. Because these scenarios are all based on the future, there is no way to verify them in the present.
When evaluating climate predictions, the expression 'actions speak louder than words" is a wise mantra. Forget what politicians and CEOs and celebrities and VC guys say. Look at what they do in their own lives.
President Obama informed us for years that hurricanes were getting stronger and more deadly because of climate change. When he left the WH, he bought a huge mansion on Martha's Vineyard, overlooking the North Atlantic -- Noreaster Alley.
The tech VC guys are all in on ESG. They live in Silicon Valley. They invest (mostly) in Silicon Valley. Silicon Valley sits at sea level. They are investing their own money in the very place they are saying will be underwater.
Hollywood celebrities wax eloquently (well, maybe that's an overstatement) on Twitter about how climate change is making CA wildfires so much worse. And then they buy mansions in Malibu and Pacific Palisades. (And I doubt the current fires will cause even 1 of them to move.)
I have neither the time nor expertise to evaluate climate science. But I can evaluate what the wealthy and powerful, who have a whole lot more to lose than I do, think about climate change. And regardless of their words, their actions have always said they think it's bunk.